Crunch Craft, a catering company, provides catering services to its customers. Customers normally pay for catering services after the service has been provided. In January 2022, Crunch Craft provided catering services worth $30,000 which it will receive in cash in February 2022. A senior accountant at Crunch Craft wants to record the $30,000 as an asset in the company’s Balance Sheet at the end of January 2022. Should the $30,000 be recorded as an asset in the company’s Balance Sheet at the end of January 2022? Explain, using the definition and recognition criteria of an asset in your explanation.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question

Crunch Craft, a catering company, provides catering services to its customers. Customers normally pay for catering services after the service has been provided. In January 2022, Crunch Craft provided catering services worth $30,000 which it will receive in cash in February 2022. A senior accountant at Crunch Craft wants to record the $30,000 as an asset in the company’s Balance Sheet at the end of January 2022.

Should the $30,000 be recorded as an asset in the company’s Balance Sheet at the end of January 2022? Explain, using the definition and recognition criteria of an asset in your explanation.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting Equation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education